In his Real Money column "Here's What Successful Speculation Really Looks Like" Jim Cramer reminded viewers that the goal of investing is to make money, not to make a statement. Rather than speculating on a meme stock, find a well-run company worth believing in.
Plug Power (PLUG) is on a mission to make green hydrogen a reality. After toiling for years, its efforts also are paying off, with customers like Amazon (AMZN) and Walmart (WMT) looking to make big moves into sustainability.
We looked at the PLUG charts back on Jan. 8 where we wrote that, "Let's go with the Japanese approach - let's see how the window or western gap acts as support."
Let's check out PLUG again.
In the updated daily Japanese candlestick chart of PLUG, below, we can see that the first window (a.k.a. gap) in January has not been filled. Prices gapped higher two more times and the third gap indeed acted as support. Prices are well above the rising 50-day moving average line and extended or overbought compared to the rising 200-day moving average line which intersects down around $20.
The On-Balance-Volume (OBV) line has been in an uptrend since June and confirms the price gains. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since June but just crossed to the downside for a take profit sell signal.
In the weekly Japanese candlestick chart of PLUG, below, we can see that prices have made a parabolic move to the upside.
The OBV line is strong and so is the MACD oscillator. I can see two upper shadows above $70 telling us that traders have so far rejected those gains.
In this daily Point and Figure chart of PLUG, below, we can see a potential price target of $88. A decline to $60 might weaken this chart.
Bottom-line strategy: PLUG is trading strongly with price gaps and an upper level consolidation pattern the past three weeks. Trade PLUG from the long side risking a close below $60. The $88 area is now our price objective.